Welcome to edition 551 of Insider Weekends. Insider buying decreased last week with insiders purchasing $37.41 million of stock compared to $53.65 million in the week prior. Selling also declined with insiders selling $1.25 billion of stock last week compared to $2.32 billion in the week prior.
If you are interested, you can check out my thoughts about the current market cycle and our writeup of our best idea for 2021 at Rich Howe’s site Stock Spin-Off Investing here. Our boring idea for 2021 was inspired by the last Insider Weekends post where we discussed an insider purchase by a director of Berkshire Hathaway.
Sell/Buy Ratio: The insider Sell/Buy ratio is calculated by dividing the total insider sales in a given week by total insider purchases that week. The adjusted ratio for last week dropped to 33.53. In other words, insiders sold almost 34 times as much stock as they purchased. The Sell/Buy ratio this week compares favorably with the prior week, when the ratio stood at 43.32.
Note: As mentioned in the first post in this series, certain industries have their preferred metrics such as same store sales for retailers, funds from operations (FFO) for REITs and revenue per available room (RevPAR) for hotels that provide a better basis for comparison than simple valuation metrics. However metrics like Price/Earnings, Price/Sales and Enterprise Value/EBITDA included below should provide a good starting point for analyzing the majority of stocks.
Notable Insider Buys:
1. Steel Partners Holdings L.P. (SPLP): $13.38
Senior Vice President Gordon A. Walker acquired 77,268 shares of this industrial conglomerate, paying $11.93 per share for a total amount of $921,889. These shares were purchased indirectly through a trust.
You can view the list of recent insider transactions for Steel Partners Holdings L.P. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: 25.29|
|P/S: 0.24||Price/Book: 0.72||EV/EBITDA: 17.42|
|Market Cap: $337.27M||Avg. Daily Volume: 82,147||52 Week Range: $4.31 – $13.53|
2. Conagra Brands, Inc. (CAG): $33.86
Director Richard H. Lenny acquired 10,000 shares of this consumer packaged goods food company, paying $33.70 per share for a total amount of $336,952. Mr. Lenny increased his stake by 10.38% to 106,297 shares with this purchase.
You can view the list of recent insider transactions for Conagra Brands, Inc. here.
|P/E: 14.91||Forward P/E: 12.97||Industry P/E: 24.20|
|P/S: 1.44||Price/Book: 1.97||EV/EBITDA: 10.75|
|Market Cap: $16.54B||Avg. Daily Volume: 3,182,709||52 Week Range: $22.83 – $39.34|
3. REV Group, Inc. (REVG): $9.13
Shares of this specialty vehicles manufacturer were acquired by 2 insiders:
- Chief Financial Officer Mark A. Skonieczny Jr. acquired 15,000 shares, paying $9.09 per share for a total amount of $136,350. Mr. Skonieczny increased his stake by 8.52% to 191,108 shares with this purchase.
- Chief Human Resources Officer Christopher M. Daniels acquired 5,500 shares, paying $9.08 per share for a total amount of $49,940. Mr. Daniels increased his stake by 4.34% to 132,120 shares with this purchase.
The group of insider purchases this week have been rather lackluster. I don’t know if this is because we are in an earnings related quiet period or because the market is at such an elevated level that insider buying has mostly dried up. For example, I wouldn’t normally look much into a company like REV Group because the company was a low growth and low margin business pre-pandemic and things have obviously gotten worse during the pandemic.
The company makes specialty vehicles like firetrucks, ambulances, school buses and RVs. They own a number of interesting luxury RV brands like American Coach, Fleetwood and Monaco but the RV part of their business only represents a third of their revenue. EBITDA margins of 10.6% was the best in the RV segment of their business, while revenue growth in Q4 2020 (ended October 2020) was best in their fire and emergency (F&E) vehicles division. Overall revenue was impacted by a big decline in their commercial vehicles division.
The one bright spot in the business besides the revenue growth in F&E was that adjusted EBITDA margin improved to 4.5% for full year 2020 and the company generated nearly $27 million in free cash flow. That puts the valuation at nearly 35 times FCF considering the company’s enterprise value of $937 million. Quite clearly insiders of the company are seeing something I am not and appear to be optimistic about the REV Group’s prospects based on their insider purchases.
You can view the list of recent insider transactions for REV Group, Inc. here.
|P/E: N/A||Forward P/E: 9.82||Industry P/E: 36.43|
|P/S: 0.25||Price/Book: 1.23||EV/EBITDA: 20.41|
|Market Cap: $580.69M||Avg. Daily Volume: 256,052||52 Week Range: $3.5 – $10.89|
4. Trinity Place Holdings Inc. (TPHS): $1.39
President and CEO Matthew Messinger, acquired 10,000 shares of this real estate holding, investment, and asset management company, paying $1.40 per share for a total amount of $14,000. Mr. Messinger, increased his stake by 0.76% to 1,321,869 shares with this purchase.
You can view the list of recent insider transactions for Trinity Place Holdings Inc. here.
|P/E: 2.67||Forward P/E: N/A||Industry P/E: 128.28|
|P/S: 859.99||Price/Book: 0.62||EV/EBITDA: -19.15|
|Market Cap: $44.72M||Avg. Daily Volume: 42,085||52 Week Range: $1.11 – $3.6|
5. New York City REIT, Inc. (NYC): $10.15
CEO, President and Secretary Edward M. Weil Jr. acquired 860 shares of this commercial real estate REIT, paying $8.92 per share for a total amount of $7,671. Mr. Weil increased his stake by 22.34% to 4,710 shares with this purchase.
You can view the list of recent insider transactions for New York City REIT, Inc. here.
|P/E: N/A||Forward P/E: N/A||Industry P/E: N/A|
|P/S: 1.82||Price/Book: N/A||EV/EBITDA: 27.65|
|Market Cap: $129.95M||Avg. Daily Volume: 24,331||52 Week Range: $7.6 – $30|
You can view the full list of purchases from this Insider Buying page.
Notable Insider Sales:
1. Facebook, Inc. (FB): $251.36
Shares of Facebook were sold by 2 insiders:
- COB and CEO Mark Zuckerberg sold 223,750 shares for $259.78, generating $58.12 million from the sale. These shares were sold indirectly by various entities.
- VP and General Counsel Jennifer Newstead sold 213 shares for $256.28, generating $54,588 from the sale.
You can view the list of recent insider transactions for Facebook, Inc. here.
|P/E: 28.64||Forward P/E: 23.94||Industry P/E: 38.55|
|P/S: 9.07||Price/Book: 6.08||EV/EBITDA: 22.22|
|Market Cap: $715.95B||Avg. Daily Volume: 18,854,684||52 Week Range: $137.1 – $304.67|
2. Ameresco, Inc. (AMRC): $54.03
Shares of this comprehensive energy services provider were sold by 3 insiders:
- Director Joseph W. Sutton sold 198,800 shares for $59.02, generating $11.73 million from the sale. These shares were sold indirectly by Sutton Ventures LP.
- President and CEO George P. Sakellaris sold 188,774 shares for $58.69, generating $11.08 million from the sale.
- EVP and General Counsel David J. Corrsin sold 98,118 shares for $58.97, generating $5.79 million from the sale.
You can view the list of recent insider transactions for Ameresco, Inc. here.
|P/E: 50.26||Forward P/E: 44.29||Industry P/E: 177.46|
|P/S: 2.52||Price/Book: 5.59||EV/EBITDA: 31.61|
|Market Cap: $2.59B||Avg. Daily Volume: 416,006||52 Week Range: $13.38 – $63.45|
3. Masimo Corporation (MASI): $261.37
Shares of this medical technology company were sold by 2 insiders:
- CEO and Chairman of the Board Joe E. Kiani sold 66,677 shares for $281.60, generating $18.78 million from the sale. These shares were sold indirectly by a trust.
- Director Craig B. Reynolds sold 10,000 shares for $279.74, generating $2.79 million from the sale. These shares were sold as a result of exercising options immediately prior to the sale.
You can view the list of recent insider transactions for Masimo Corporation here.
|P/E: 67.89||Forward P/E: 68.42||Industry P/E: 67.89|
|P/S: 13.13||Price/Book: 10.17||EV/EBITDA: 49.08|
|Market Cap: $14.39B||Avg. Daily Volume: 320,455||52 Week Range: $143.9 – $284.86|
4. GameStop Corp. (GME): $35.5
Shares of this multichannel video game operator were sold by 4 insiders:
- Director James Kurt Wolf sold 810,000 shares for $21.22, generating $17.19 million from the sale. These shares were sold indirectly by Hestia Capital Management, LLC.
- Director Kathy P. Vrabeck sold 50,000 shares for $27.99, generating $1.39 million from the sale.
- Director Raul J. Fernandez sold 34,619 shares for $35.28, generating $1.22 million from the sale.
- Director Lizabeth Dunn sold 5,000 shares for $31.34, generating $156,700 from the sale.
GameStop, the value stock of the last decade was the very definition of a value trap or a “melting ice cube”. Valuations always looked attractive when looking in the rear view mirror while revenue kept declining quarter after quarter. Several deep value investors were attracted to this retailer of video games even as it was accosted on multiple fronts by Amazon and a shift to online gaming.
All of that came to an end in the last six months with the stock shooting up a whopping 747% on the tail winds of an e-commerce strategy, a new gaming console cycle and more importantly a massive short squeeze. Roles reversed, with value investors being vindicated while short sellers getting burned as momentum continued to propel the stock higher. It is not surprising that insiders are using this golden opportunity to head for the exits. This is the first cluster of insider sales we have seen at the company since late 2015.
You can view the list of recent insider transactions for GameStop Corp. here.
|P/E: N/A||Forward P/E: -208.82||Industry P/E: 38.83|
|P/S: 0.48||Price/Book: 6.97||EV/EBITDA: -26.99|
|Market Cap: $2.48B||Avg. Daily Volume: 13,581,184||52 Week Range: $2.57 – $43.06|
5. DexCom, Inc. (DXCM): $354.2
Chairman, CEO & President Kevin R. Sayer sold 47,022 shares of this medical device company for $360.81, generating $16.97 million from the sale.
You can view the list of recent insider transactions for DexCom, Inc. here.
|P/E: 146.42||Forward P/E: 108.99||Industry P/E: 67.89|
|P/S: 18.68||Price/Book: 22.68||EV/EBITDA: 93.23|
|Market Cap: $34.01B||Avg. Daily Volume: 1,188,473||52 Week Range: $182.07 – $456.23|
You can view the full list of sales from this Insider Sales page.
Disclaimer: Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.